SCOR will appeal to European authorities over CCR monopoly
French reinsurer SCOR has stated that it intends to turn to the European authorities to contest the virtual monopolyCaisse Centrale de Réassurance (CCR), the state-backed French reinsurer, has on natural catastrophe reinsurance in France.
Constitutional Council, the highest constitutional authority in France, recently announced its decision to back conformity with the Constitution of Article L. 431-9 of the Insurance Code in France, which gives virtual exclusively to CCR for the reinsurance of risks from natural disasters.
SCOR suggests that it would be in the interests of policyholders and insurers to review and reconsider the current arrangement whereby CCR has a quasi-monopoly on cat risks in the country.
In a statement, SCOR said: “SCOR is surprised that this decision is motivated by the fact that the CCR would be ‘required to reinsure all insurers who ask when they meet legal and regulatory requirements,’ when no text provides such an obligation.”
It continued: “SCOR does not dispute that the insurance plan disaster itself, or the existence of a state guarantee ultimately observed that the exclusive nature of this guarantee, combined with the lack of supervision its scope, gives the CCR quasi-monopoly and allows it to hold more than 90% market share.
“The extension of the reinsurance market beyond the quasi-monopoly of the CCR would improve service to policyholders and insurers, to mobilize additional reinsurance capacity and thus limit the exposure of the state to financial risks associated with natural disasters.”
SCOR also notes in its statement that the Constitutional Council is strictly limited to the rights and freedoms guaranteed by the Constitution. Therefore, the decision does not prejudge the conformity of quasi-monopoly of the CCR in the light of other pleas, including the breach of Community law.
“SCOR therefore intends to continue to promote a system of reinsurance risks related to natural disasters in accordance with law, in the context of the proceedings before the Administrative Court of Paris as well as before the European authorities,” it said.
“SCOR will make every effort to restore equality of competitive conditions for reinsurance of natural disasters in France.”
